M&A and Market Landscape Review: Long Term Retention and its Implications

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M&A and Market Landscape Review: Long Term Retention and its Implications December 13, 2018 Rob MARKET STRATEGY fburl.com/ms f PLTF EX CONFIDENTIAL PLTF EX-01370 PLTF EX-01370_0001 Long Term Retention Conclusions Agenda Implications for Youth Strategy Implications for M&A PLTF EX-01370_0002 Long Term Retention PLTF EX-01370_0003 We have definitively established tweens as the highest retention age group in the United States 4600 4200 3800 3400 3000 FB Age In Days 2600 2200 1800 1400 1000 600 200 -200 Source: Market Strategy Ana Confi 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Tweens 1950 2000 1950 2000 1950 2000 1950 2000 1950 2000 1950 2000 1950 2000 1950 2000 1950 2000 1950 2000 1950 2000 1950 2000 1950 2000 Dob Year Dob Year Dob Year Dob Year Dob Year Dob Year Dob Year Dob Year Dob Year Dob Year Dob Year Dob Year Dob Year PLTF EX-01370 0004 To give you a sense of scale, people who joined Facebook at 11 years old have almost 4X the LTR of those who joined as 20 year-olds Source: Market Strategy Analysis MAP Retention Percent 2003 Age: 11 100 80 60 40 20 0 0 200 400 600 800 1000 FB Age In Days 2001 Age: 13 1999 Age: 15 1994 Age: 20 5 PLTF EX-01370_0005 Implications for Youth Strategy PLTF EX-01370_0006 If we want to win big with teens, we must bring them in as tweens Source: Market Strategy Analysis 7 PLTF EX-01370_0007 Logic Chain 1. People stick with the apps they start with • People who join Facebook as tweens continue on Facebook for years and years • Loss of teens on Facebook is primarily a generational shift • People who join Snapchat as teens continue on into adulthood 2. People spend most of their time with their #1 social app-we want to be #1 for as many people as possible Being #1 social app for teen users is crucial Share of Total Daily Time Spent on Social Apps, US Android Teens Source: Market Strategy Analysis 53 min/day 17 min/day 20% 2 3 Ordinal most-used social app per user In social, we should aim to be WL for as many teens as possible Anything less than 1 much less consequential 8 PLTF EX-01370_0008 So what should we do? 1. Very deeply understand what makes Facebook work amazingly for those who join as tweens 2. Build for tweens (which may mean building a “teen” product) above all other age categories, whether kids or late teens Source: Market Strategy Analysis 9 PLTF EX-01370_0009 Implications for Youth M&A PLTF EX-01370_0010 If we were looking at Facebook as an M&A candidate, we would buy it Source: Market Strategy Analysis 11 PLTF EX-01370_0011 Logic Chain 1. Facebook's retention is incredibly high • We have seen this with our internal long term retention data • And even using the external MINT/Onavo data we see very favorable figures-for outside apps we are happy if it hits 20% daily retention at 30 days. FB is regularly 30-40%, even on iOS! Facebook US OS Teens (<18) 100 50 00 New User Retenti 8 S S 20 10 Source: Market Strategy Analysis Legend 224 Cofort 2008- 20 22 26 20 Day Entity Platform Cohort(s) 2007-12-01 2018-00-01 2008-08-01 Age Bracket All A 12 PLTF EX-01370_0012 So what should we do? 1. Facebook very clearly is an amazing product for many tweens/teens. Do we understand the root cause of its shortcomings? 2. If yes, are we solving those? 3. If no, are we okay with that? Source: Market Strategy Analysis 13 PLTF EX-01370_0013 APPENDIX PLTF EX-01370_0014 On Instagram, teen adoption is more rapid year after year. There is no tween or teen problem on Instagram Ig DAP 4M 3M 2M 1M 0 14 16 18 Source: Market Strategy Analysis Credit: Laura 20 Approximate Age 22 24 26 https://our.internmc.facebook.com/intern/anp/view/?id=37995 yob 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 15 PLTF EX-01370_0015 CONFIDENTIAL CONFIDENTIAL Document Provided in Native Format PLTF EX PLTF EX-01370 ΜΕΤΑ3047MDL-047-00544632 METANMAG-005-01230256 PLTF EX-01370_0001